The Stark County Metropolitan Housing Authority board has reluctantly accepted a federally-proscribed recovery plan to keep the agency functioning as it exists today.

The plan, adopted Thursday afternoon, was drafted by the U.S. Department of Housing and Urban Development, which supplies the bulk of funding to the Housing Authority's $32 million annual budget.

It requires SMHA to fix 16 problem areas by a variety of target dates throughout 2014. Those areas fall within the more broad categories of governance/oversight; governance/knowledge and finance.

The document, among other determinations, indicates the agency engaged in the unauthorized use of federal funds, lacks proper accounting, and that the five-member board and prior executive directors lacked oversight and knowledge of operations and HUD regulations.

In July, the HUD Office of Inspector General released a report that stated SMHA had spent $10.5 million in public housing dollars on ineligible projects and/or without the required documentation during the past decade.

SMHA Executive Director Herman Hill — hired in February — told the board if they don't adopt and follow the plan, the agency could fall into receivership. That is, day-to-day operations would be contracted out.

THE PLAN

Board member Daniel Fonte at first indicated he couldn't vote for the plan because he believes he acted in good faith and conscience, based on information he was given during that decade span.

"To me, to accept this ... is to admit that we did something wrong," Fonte said. "I'm not going to be the fall guy. HUD has culpability in this. Where were they at? ... Now they want to say it's all our fault."

The five-page plan details steps the Housing Authority must take to prevent the issues from happening again. Some requirements had already been initiated or were in progress under Hill's leadership.

They include:

• Board training in federal expenditure requirements

• Creation of a board financial subcommittee

• Providing performance standards for its executive director

• Ensuring the director understands public housing programs

• Board and staff training in procurement policies

• Identifying cost efficiencies in budgeting

• Possibly explore options to nullify oil and gas leases on public property

• Use of efficient and accepted banking practices.

• Finance training for executive staff

• Creation of a maintenance plan.

Hill said the Housing Authority has until the end of June to adopt financial details of the recovery plan. He said he's involved in ongoing negotiations with HUD to determine if the agency must pay itself back all $10.5 million from non-public housing revenue, or if that amount could be reduced.

RELUCTANCE

Board members Marilyn Frazier, Jeff McDaniels and Frank Beane said they agreed with Fonte. In the end, though, all four, along with Linda Bell, unanimously adopted the plan.

Page 2 of 2 - Before the meeting, members noted some who came to observe the meeting: Stark County Commissioner Richard Regula and Stark County Family Court Judges Rosemarie Hall and Jim James.

The commissioners have one appointee on the board (Beane), whose term expires Jan. 31. Banking industry veteran Roger Mann will replace Beane, who served on the SMHA board for 27 years. The Common Pleas judges also have an appointee (Bell), whose term ends in 2015.

Fonte spoke the most and the loudest. He said he was tired of being beat up in the newspaper, referring to a series of stories The Repository wrote about SMHA, and by his friends.

He said the HUD recovery plan is unfair because it repeatedly states the board did not provide proper oversight.

"They're saying we didn't do our due diligence and I think we did," he said, explaining the board was provided bad information from previous agency officials. "The only dog I have in the fight is my reputation and that means a lot to me."

Hill told the board SMHA was bigger than any one person or group. He said it was time to move forward and urged them to approve the plan. He told them they had little choice.

Frazier, McDaniels and Beane said they agreed with Fonte's statements, though they didn't elaborate. Approval of the plan, they said, was for the benefit of residents who count on the agency.